Joint Ventures Between Railways and State Governments

In order to meet the growing demands for new projects and also to expedite ongoing projects, Ministry of Railways initiated the scheme of project development, financing and monitoring through formation of Joint Ventures/SPVs with State Governments. This, inter-alia, involves surveys, preparation of Detailed Project Report (DPR) and getting requisite approvals, processing for sanctioning and monitoring of identified projects including last mile connectivity, capacity enhancement and station redevelopment projects. Many State Governments were requested for signing of MoUs in this regard. Consequently, Memorandum of Understanding (MoU) for setting up JV (Joint Venture) Companies have been signed with Maharashtra, Odisha, Andhra Pradesh, Kerala, Chhattisgarh and Telangana. A similar JV Company is already in place for Karnataka State.

Ministry of Railways has included 13 projects in Railway Budget 2016-17 subject to requisite approvals which are proposed to be taken up on Joint Venture model. The details of the projects are:-

S. No.

Name of project

Rly

PH

Length
(Km)

Cost

(Rs in cr)

State

1

Vikramshila-Katareah (Pirpanthi- Naugachia)

ECR

NL

18

1601

Bihar, Jharkhand

2

Dongargarh-Kharigarh-Kawardha-Bilaspur

SECR

NL

270

2500

Chhattisgarh

3

Jeypore-Malkangiri

ECOR

NL

130

1277

Odisha

4

Jeypore-Navarangpur

ECOR

NL

38

485

Odisha

5

Chitra-Basukinath

ER

NL

37

859

Jharkhand

6

Meerut- Panipat

NR

NL

104

2200

Uttar Pradesh

7

Godda-Pakur

ER

NL

80

1723

Bihar, Jharkhand

8

Bahraich-Sravasti- Balrampur(tulsipur)

NER

NL

80

1600

Uttar Pradesh

9

Morappur and Dharmapuri new line

SR

NL

36

134

Tamil nadu

10

Indore-Manmad via Malegaon

CR

NL

368

9968

Madhya Pradesh, Maharashtra

11

Indore-Jabalpur

WCR

NL

342

4320

Madhya Pradesh

12

Pune-Nashik

CR

NL

265

2425

Maharashtra

13

Guntakal- Guntur

SCR

DL

443

4000

Andhra Pradesh

Further, in anticipation of various State Governments coming forward to take up projects through Joint Venture, 30 projects (25 New Line, 2 Doubling & 3 Gauge Conversion) have been included in Capital Investment Programme of 2016-17 (incorporated as annexure to the ‘Pink Book’ of sanctioned works) at an anticipated cost of Rs. 58,274 crores. Details of these 30 projects are as under:-

S. No.

Name of project

Rly

PH

Length
(Km)

Cost

(Rs in cr)

State

1

Daboi-Chandod GC with extn. to Rajpipla new line

WR

GC

37

1500

Gujarat

2

Chuchapura-Navsasri-Tanakhala

WR

GC

38

500

Gujarat

3

Gadchandur-Adilabad

SCR

NL

70

1500

Maharashtra, Telangana

4

Behrampur-Sambalpur

ECoR

NL

270

5000

Odisha

5

Junagarh-Ambaguda via Navrangpur

ECoR

NL

145

2900

Odisha

6

Banspani-Barbil

ECoR

NL

17.5

350

Odisha

7

Gadwal-Macherla

SCR

NL

184

3500

Telangana, Andhra Pradesh

8

Kannur-Mattannur

SR

NL

23

400

Kerala

9

Nanjangod-Nilambur

SR

NL

236

6000

Kerala, Karnataka

10

Lumding-Dibrugarh

NFR

DL

340

5000

Assam

11

Mysore-Kushalnagar

SWR

NL

85

667

Karnataka

12

Barson-Banspani/ Narayangarh

ECoR

NL

52

1400

Odisha

13

Jaisalmer-Bhaber

NWR

NL

339

5000

Rajasthan

14

Kashipur-Dhampur

NR

NL

58

1200

Uttar Pradesh, Uttarakhand

15

Latur-Nanded via Loha & Ahmedpur

CR

NL

155

3100

Maharashtra

16

Parbatsar to Kishangarh

NWR

NL

45

900

Rajasthan

17

Bhiwani-Loharu

NR

NL

64

1280

Haryana

18

Dehradun-Vikasnagar

NR

NL

38

628

Uttarakhand

19

Ujjain Fatehabad

WR

GC

20

120

Madhya Pradesh

20

Urai-Mahoba

NCR

NL

90

1800

Uttar Pradesh

21

Bhind-Lahar-Konch

NCR

NL

80

1600

Madhya Pradesh

22

Jeur Ashti

CR

NL

78

1560

Maharashtra

23

Talaguppa-Siddhapura

SWR

NL

16

320

Karnataka

24

Bangarpet- Mulbagal

SWR

NL

40

800

Karnataka

25

Sakleshpur- Subramaniyam Rd

SWR

DL

60

500

Karnataka

26

Secunderabad- Zaheerabad

SCR

NL

70

1400

Telangana

27

Bodan- Bidar

SCR

NL

100

2000

Telangana

28

Jalna-Khamgaon

CR

NL

155

3000

Maharashtra

29

Talguppa- Honavar

SWR

NL

82

2500

Karnataka

30

Dharwad – Belgaum

SWR

NL

91

1850

Karnataka

The role of Joint Venture Company, inter alia, is to choose projects, identify and collaborate with its stakeholders, mobilize resources, form project specific Special Purpose Vehicle (if required). The Joint Venture can mobilize resources in the form of debt from banks/multi-lateral agencies/ Financial Institutions as debt funding by leveraging the equity or in the form of financial support from various stakeholders of the projects through the formation of project specific Special Purpose Vehicle. The project specific Special Purpose Vehicle will have equity participation of Ministry of Railways and the State Government through the Joint Venture. The Special Purpose Vehicle shall be at the liberty to arrange investment from other Stakeholders, Public Sector Undertakings, raise debt from Banks or Financial Institutions for undertaking a project.

As per the Shareholding Pattern approved by Cabinet, Ministry of Railways can have the equity participation upto 50% in the Joint Venture & State Government to have the balance equity participation.

Formation of JV Company will help in mobilization of additional resources for execution of railway projects resulting in expansion of Railway Network in the country. A railway line in any area is an engine of growth for the entire economy. It will enhance economic/commercial activities and help generate large quantum of direct & indirect employment.

This Press Release is based on information given by the Minister of State for Railways Shri Manoj Sinha in a written reply to a question in Rajya Sabha on 06.05.2016 (Friday).